With the spread of this pandemic across the country brings many questions to the real estate market. What exactly does this mean on the normal trends that this business is used to? Due to COVID-19, executives are now concerned about a whole new variety of issues. Keeping tenants and visitors safe and healthy is now a much higher priority than ever before. The value and liquidity of these real estate markets are changing quite rapidly due to people not interested in being outside anywhere near as much. Solitude and long-term leases are going to be much more sought after due to these recent occurrences.
Priorities for Real Estate Executives
Before COVID-19 entered into the country, short-term leases, amount of capital available, and the leverage ratios for these different occupancies were quite high. However, due to the pandemic, people are now looking for solid, long-term property. They no longer wish to be stricken with the idea that if a pandemic hit on the last month of their lease, they would be left homeless. This is also more difficult for these executives, because they must be concerned about the health risks of their employees. Showing homes, rental office workers and hospitality workers are at risks that were never even considered beforehand.
From this point onward, real estate will be looked at in a whole new manner. There is going to be more remote work because people are trying to social distance and stay healthy. This meaning that office facilities are going to remain small. Due to changes in supply chain, these transaction trends are going to be very bad during the short term. After a period of recovery, these subsectors of offices and industrial business are going to need their workspaces again. For now, prioritizing the health of workers, safety of tenants and others is essential to the survival of the real estate market!